Inflation is a cause for concern in both America and Europe. The economic circumstances are different, but that only makes it more compelling to compare the two economies. There is also another reason to do so, and it has to do with President Trump’s use of tariffs as tools in negotiating new trade deals for the United States—specifically, the suggestion that tariffs cause inflation.
On July 10th, President Donald Trump wrote a letter to Canadian Prime Minister Mark Carney, explaining the reasons why the United States was going to impose a 35% tariff on imports from Canada. Two days later, CNBC reported that the United States
will impose a 30% tariff on goods from the European Union and Mexico that will take effect on Aug. 1. … Trump said there will not be tariffs on goods from the EU if the 27-member bloc “or companies within the EU, decide to build or manufacture product[s] within the United States”
This is a milder tariff threat than the 50% tariffs that Trump had announced but delayed indefinitely in May. It remains to be seen if the 30% tariffs become reality; so far, Trump’s original announcements of tariffs have largely served their purpose of bringing foreign governments to the negotiating table.
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